This week, it became known that Goldman Sachs, one of the world's largest investment banks, plans to launch new cryptocurrency services. These will be available to their high value investors and will gain access to bitcoin and ethereum.
It is basically a Goldman Sachs options market. It is designed to manage the risk and increase the return of these portfolios (which are essentially volatile).
The bank has also filed with the SEC for an Ether Fund through Galaxy Digital. In addition, a cryptocurrency investment firm has aligned with Goldman Sachs to provide liquidity for its futures offerings. The fund, already available, is called the Galaxy Institutional Ether Fund and requires a minimum of $250,000 in bitcoin to make an investment.
This strategy was highlighted in Tuesday's Galaxy presentation. Among other things, Goldman Sachs was listed as receiving a referral fee for referring clients to the fund.
However, this isn't the first time Goldman Sachs has ventured into cryptocurrency investment trading. Last June, the investment banking firm also partnered with Galaxy Digital to launch and manage Goldman Sachs' bitcoin futures product.
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Goldman Sachs Ether Investment Options Details
According to the revised Form D document, the Galaxy Institutional Ether Fund was launched in February 2021 with a minimum initial investment of $250,000, essentially limiting access to institutional participants.
The SEC filing further describes 28 clients registered with the fund at the time of filing. Total investment assets exceeded $50 million.
While Goldman Sachs was not tied to Galaxy's ETH fund at launch, the filing notes that Goldman Sachs will receive an undisclosed amount as a finder's fee for future registered accounts it sends to Galaxy.
CAIS Capital, an independent wealth management firm, is also filed as a recipient of placement fees for referring clients to Galaxy's ETH funds.
"Goldman Sachs & Co. LLC will receive referral commissions for certain clients referred to the Issuer; CAIS Capital LLC will receive a placement fee for clients referred by the Issuer, with each client reporting to its respective client." Indicates document.
While Galaxy Digital appears to have cracked the SEC's code to offer cryptocurrencies to large customers, other efforts have not been as successful.
Curious about cryptocurrencies
Meanwhile, Goldman Sachs senior chairman Lloyd Blankfein is also curious about the cryptocurrency space. On Monday, he tweeted that there is no "time" for cryptocurrencies, given the extremely high inflation rate and the freezing of personal bank accounts around the world.
Let's remember that the growth of Ether is linked to the growing popularity of decentralized finance using blockchain technology to rebuild traditional financial instruments, such as loans and interest. In this way, it tries to replace the role of banks with blockchain-based protocols.